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Casino financial performance improves in 2018

Casino financial performance improves in 2018

Properties plan new promotions in 2019, but legalized sports gambling tops wish list
Casino financial performance improves in 2018
The Rivers Casino held a press preview of Dealer School for learning the basics of how to be a casino dealer.
Photographer: Gazette file photo

SCHENECTADY -- The casino industry in and around the Capital Region saw an improved financial performance in 2018 and is preparing new promotions to keep the momentum going in 2019.

The least-certain but most-desired item on their lists appears to be sports betting. 

The U.S. Supreme Court, in mid-2018, allowed states to legalize betting on sports, and New York state would only need to tweak current regulations to make it happen here. But there has been little public discussion of doing so, as Gov. Andrew Cuomo and other Democrats pursue a progressive agenda that had been thwarted for years by a Republican-controlled state Senate.

Another priority for some casinos is getting a reduction in state taxes and fees. That behind-the-scenes effort was revealed in early 2018 and was promptly rejected by Cuomo and some legislators, but it remains on the casinos' priority list.

Rivers Casino & Resort in Schenectady, which is subject to a substantially higher tax rate than other non-Indian casinos in the state, under the language of the state’s original casino legislation in 2013, retained a lobbyist in late December 2018, state Gaming Commission archives show. 

Del Lago Resort and Casino in the Finger Lakes region, which also has sought tax relief, said it is struggling against the numerous Indian-run casinos in central New York that pay the state much less.

Here’s a look at what happened in 2018 and what’s ahead in 2019 for the state’s four non-Indian casinos; the only video slot casino in the Capital Region (Saratoga Casino Hotel); and the nearest out-of-state casino to the Capital Region (MGM Springfield in Massachusetts).

FINANCIAL PERFORMANCE

Rivers in Schenectady was a top performer, financially, among the state's four non-Indian-run casinos in 2018. It is third in size and was third in construction budget among the four, but it was second in average monthly revenue, first in taxes paid and first, by a wide margin, in dollars gambled per day in slot machines, which is a critical metric, as casinos derive most of their revenue from slots.

Average per-month gross gaming revenue (net dollars lost by gamblers) in 2018/2017:

  • Rivers $12.86M/$11.66M
  • Saratoga $10.53M/$11.45M
  • Del Lago $12.59M/$12.38M
  • Resorts World $13.16M/NA
  • Tioga Downs $6.52M/$5.77M
  • MGM Springfield $23.48M/NA.

Number of slot machines in 2018 and average daily dollars gambled in each, a key measure of patron activity: 

  • Rivers 1,150/$253
  • Saratoga 1,706/$205
  • Del Lago 1,961/$163
  • Resorts World 2,155/$114
  • Tioga Downs 943/$197
  • MGM Springfield 2,500/$203.

Slot machine tax rate and average taxes paid per month, 2018/2017: 

  • Rivers 45%/$4.34M/$4.18M
  • Saratoga 46%/$5.0M/$5.47M
  • Del Lago 37%/$3.81M/$3.69M
  • Resorts World 39%/$3.46M/NA
  • Tioga Downs 37%/$2.16M/$1.91M
  • MGM Springfield 25%/$5.87M/NA.

While the three established New York casinos increased their tax contributions in 2018, their second year of operation, they are still falling short of the rosy predictions offered when state officials were seeking voter approval of limited non-Indian casino gambling, and when casino operators were submitting their proposals to state regulators.

For calendar year 2018, Rivers paid $41.84 million in gaming taxes to the state; $2.61 million each to the county and city of Schenectady; and a combined total of $5.23 million to Albany, Fulton, Montgomery, Rensselaer, Schoharie and Washington counties. 

RIVERS CASINO & RESORT

Rivers Casino & Resort opened on the Schenectady waterfront in February 2017. In its second year, it added features designed to attract more patrons and enhance their experience:

It debuted its popular Harbor Jam summer concert series, introduced off-track betting through a partnership with Capital OTB and hosted more than 350 special events.

Looking ahead, Rivers said via email: “2019 is shaping up to be another exciting year. We have legendary R&B singer Keith Sweat coming to the Event Center on Jan. 20, we are eagerly anticipating the approval of sports betting by the New York State Gaming Commission, and for the rest, stay tuned.” 

The casino's Summer Jam lineup is expected to be released soon.

But all is not peachy, Rivers said in the same email:

“While we made progress growing our gaming revenue in 2018, our expenses have also increased. We operate in a highly competitive gaming market, made more so by the highest slot tax rate in the region. We are grateful to our entire team for their significant effort to adapt to these conditions and thank the community for their continued support.”

SARATOGA CASINO HOTEL

Saratoga Casino Hotel was the first of the state’s racinos, which were video slot machine casinos added to harness horse racing venues. Its annual revenue grew in all but one fiscal year between April 2004 and March 2017. 

Then Rivers Casino opened 22 miles away.

As racino management feared, Rivers cut into business. Average gross revenue in Saratoga went from $13.63 million per month in 2015-16 to $13.67 million in 2016-17 to $10.91 million in 2017-18 and $10.69 million in the first nine months of the 2018-19 period.

The racino did not give up, though, adding a hotel and changing its name to Saratoga Casino Hotel. It has made other changes to attract patrons, as well.

General Manager Alex Tucker said on Friday, via email:

“This year, as we celebrate our 15th anniversary as New York state’s debut [video lottery terminal] facility, we look forward to offering up a variety of exciting additions that we’ll soon be unveiling to our guests. One of the most prominent will be the addition of an outdoor gaming terrace that we began work on in November. After its completion in the spring, we’ll be able offer guests a unique setting along our historic harness track where they can enjoy 50 slot machines year-round.

"The outdoor gaming terrace will be the first of a number of new and exciting changes that we have planned for 2019. We look forward to announcing details on some additional projects in the near future.”

MGM SPRINGFIELD

After Rivers and Saratoga, the casino that is closest to much of the Capital Region is in Springfield, Massachusetts.

MGM opened its $960 million facility there in late August and said it drew an estimated 150,000 visitors its first weekend, the best opening ever among more than two dozen MGM properties worldwide.

President and Chief Operating Officer Michael Mathis told The Daily Gazette on Friday that the facility is largely complete, save for some minor reconfiguration of spaces and construction of the next location in the chain of Wahlburgers restaurants owned by brothers Donnie, Mark and Paul Wahlberg. 

What remains to be done after the truncated 2018 season is to finish integrating the casino into the community: A key strategy at the casino is revitalizing the city’s historic downtown and making it a destination for all demographic groups, whether they plan to visit the casino or not.

That effort includes everything from farmers markets to concerts to yoga. For the winter, the space is partially flooded for ice skating.

MGM used the same strategy at its Detroit casino but ramped it up in Springfield.

“We took that model and really tried to evolve it,” Mathis said. “It’s been great. The property has been extremely well-received, both from the community as well as the surrounding region.”

There will also be a stream of high-draw performers in 2019, Mathis said. Thanks to the strength of its showpiece Las Vegas properties, he said, MGM can present bigger entertainment names than might otherwise appear at a regional casino.

Mathis said his other goal for 2019 is sports gambling. Massachusetts, like New York, has not yet moved to legalize it.

“It is an initiative we’re working on with the Legislature and the governor’s office,” he said.

TIOGA DOWNS

Jeff Gural, CEO of American Racing, said 2018 at Tioga Downs was good, and 2019 could be better.

“Our gaming revenue was up 12 or 13 percent,” he said. “That’s about what we expected. We think there’s still room for more growth.”

American Racing owns Tioga Downs and another harness track: Vernon Downs. In 2016, it converted the racino at Tioga Downs into a casino.

The major difference at the Southern Tier casino in 2018 was the presence of an on-site hotel the company opened at the end of 2017. It brought in more out-of-area guests and supports the wedding/convention/event business the casino is trying to build. Gural noted many of those events are planned a year or more in advance, so a lot were booked elsewhere for 2018 — but 2019 was available, and more events were booked in Tioga.

The other thing that could make a difference in 2019: sports gambling.

“We need sports betting,” Gural said. “That’s the last piece of the puzzle for us at Tioga. For 2019, I would expect that we would have sports betting. It seems inconceivable that we won’t.”

He is perplexed there hasn’t been more movement toward legalization at the state Capitol. New Yorkers already can cross state lines to legally gamble on sports in New Jersey or Pennsylvania, he said. Or, they can stay home and gamble online illegally.

“It’s kind of baffling why politicians have gone that route,” he said.

Gural also would like some relief from high tax rates in the “totally saturated” casino market of western New York, where most of his competitors are Indian nations that pay a lesser percentage to the state.

“I think that the tax rate is too high in upstate,” Gural said. “But for the moment, my focus is really on getting sports betting. Then I can focus on the tax rate.”

RESORTS WORLD, DEL LAGO

Resorts World Catskills in Monticello is the most ambitious and expensive of the casinos mentioned in this story.

An executive told The Daily Gazette in August that Resorts World is a four-part project: casino, entertainment village with boutique hotel, indoor waterpark and golf course. 

The first pieces opened in February 2018. The water park and golf course are set to open in 2019, completing the $1.3 billion project’s draw as both a regional and destination resort.

A spokesperson for Del Lago Casino did not respond to requests for comment for this story. 

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